The business model of a traditional newspaper, like that of
a library, is crumbling. Both institutions now require the
backing of billionaires.

Why would a rich person buy a local newspaper? Many of them
clearly think it’s a good idea: Warren Buffett’s BH Media Group
already laid out more than $344 million for 29 daily newspapers,
Rupert Murdoch has his, David and Charles Koch have toyed with
buying several, and now Bezos has spent less than 1 percent of
his net worth to buy the newspaper that all of political
Washington reads over its cornflakes.

My bet is that Bezos will exploit the opportunities that
any great local paper still has. After all, a newspaper with a
stable of loyal subscribers is a modestly profitable unregulated
monopoly -- provided no other paper is struggling in the same
area. Driven by habit and interest in their community,
subscribers will keep reading comprehensive local news (the
mayor, the planning commission, the high school scandal) as well
as marriage and death notices. If you can please your audience
so that your advertisers have someone to sell to, keep staff
costs reasonable and gradually build an effective online
paywall, you’ll do fine.

Yes, the Internet has stolen a lot of the revenue from
classified advertising, but newspapers are figuring out ways to
make up some of those losses. (Ever place a death notice in the
New York Times (NYT)? It’s extraordinarily expensive.)

Local newspapers are now available at bargain-basement
rates. The Boston Globe’s pennies-on-the-dollar sale to Boston
Red Sox owner John Henry would have been the feel-weird
newspaper story of the week if it hadn’t been for Bezos.

It’s true the communications business has changed. Twenty
years ago, Americans were accustomed to receiving specific
services through special-purpose networks. Television and radio
were broadcast across airwaves designated for their use, letters
were sent through post offices, phone calls were placed over
telephone wires, and newspapers printed on wood pulp were
carried to family doorsteps and city street corners.

In such a world, newspapers could build a narrow moat
around their businesses. Steady income from advertising and
subscriptions allowed for lavish cross-subsidization: Sports
scores and business data attracted newspaper buyers and
subsidized investigative reporting and opera reviews. The
enterprise saw itself as one multifaceted entity.

Now all of the old delivery methods have collapsed into
Internet Protocol bits, and though the newspaper has gone
digital, it is just another website among many. Advertisers have
a host of ways to reach customers online, and have little reason
to pay newspapers special tribute -- even though a newspaper’s
online audience may be far larger than its print subscriber
list.

Donald Graham, the Washington Post Co.’s chief executive
officer, told his employees this week that revenue had declined
seven years in a row.

There are still profits to be made by newspapers, but
without investments large enough to intimidate would-be
competitors, even the best ones will wither away.

Enter Bezos, an investor with the deep pockets and the
logistical acumen to get the Post in fighting shape, to provide
a fine local product to more people for less money. Not
incidentally, he can cope with the paywall problems and spruce
up the Post’s second-rate website.

Plus, Bezos probably has a civic heart. Think of Stephen Schwarzman and the library building. It feels good to put your
name on something grand. And in Bezos’s case, his investment
should also return a tidy profit.

(Susan Crawford, a contributor to Bloomberg View and a
professor at the Cardozo School of Law, is the author of
“Captive Audience: The Telecom Industry and Monopoly Power in
the New Gilded Age.” Follow her on Twitter at @scrawford.)

To contact the writer of this article:
Susan P. Crawford at scrawford@scrawford.net.